NMHC’s Chairman Bob DeWitt, President and CEO of GID Investment Advisers, represented both the National Multifamily Housing Council (NMHC) and National Apartment Association (NAA) before the House Financial Services Subcommittee on Housing and Insurance yesterday. He made the case that housing finance reform must address the unique differences between the multifamily and single-family industries and maintain an explicit, paid-for federal guarantee for multifamily-backed mortgage securities that is available in all markets at all times.
“Careful and correct housing finance reform is critical to a competitive and robust apartment sector that helps nearly 39 million people live in homes that are right for them. The industry builds vibrant communities by offering housing choice, supporting local small businesses, creating millions of jobs and contributing to the fabric of communities across the country,” said DeWitt.
“The apartment industry is extremely capital intensive. Therefore, it is critical that housing finance reform provide consistent access to debt capital across geographies, markets, and product types if we are to meet the current and future demand for rental housing in America,” he explained.
As Congress considers housing finance reform, DeWitt urged lawmakers to consider six key principles:
- A reformed housing finance system must maintain an explicit, paid-for federal guarantee for multifamily-backed mortgage securities available in all markets at all times.
- There are inherent differences between the single family and multifamily sectors, both in how they operate and how they have performed.
- Private capital should dominate the multifamily sector wherever and whenever possible. Reform should ensure continued private-sector participation.
- Congress should protect taxpayers by continuing risk sharing and private capital participation.
- Congress must retain the successful components of the existing multifamily programs in whatever succeeds them.
- Congress should avoid market disruptions during the transition to a new system by clearly defining the government’s role in a reformed system and the timeline for transition.
DeWitt concluded his remarks before the Subcommittee by stating, “it is critical that the Federal Housing Administration continues to be a reliable source of construction and mortgage debt.”
As the Republican tax plan was released at the same time as the hearing, a number of members posed tax reform focused questions, sparking a lively debate on both mortgage interest deduction (MID) and state and local tax deductions (SALT). While the realtors, mortgage bankers and homebuilders expressed opposition to the bill’s provisions capping the MID and eliminating state and local tax deductions, NMHC and MBA indicated they were open to some changes on these issues.